Section 95 insolvency process: Resolution Professional examination precedes admission, with interim moratorium commencing on filing.

At the Section 95 stage under the Insolvency and Bankruptcy Code, the Adjudicating Authority does not undertake a merits determination of limitation or the validity of the personal guarantee; it appoints a Resolution Professional to examine the application and submit a report. The Resolution Professional's report is only recommendatory, and acceptance or rejection follows under Section 100 after observing natural justice. Accordingly, the proposed Resolution Professional was appointed for scrutiny of the application, and interim moratorium was recorded as commencing from the date of filing and continuing until admission.

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Issues: Whether, at the stage of a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority should appoint a Resolution Professional for examination of the application and note the commencement of interim moratorium under Section 96.

Analysis: The application was filed by a financial creditor to initiate insolvency resolution against a personal guarantor. Objections regarding limitation and the validity/release of the guarantee were raised by the personal guarantor. The order records reliance on the Supreme Court's exposition that no judicial determination is undertaken at the Section 95 to Section 99 stage and that the Resolution Professional's report is only recommendatory, with the Adjudicating Authority deciding acceptance or rejection only under Section 100 after observing natural justice. In that setting, the proposed Resolution Professional was appointed to examine the application and submit a report, and it was recorded that interim moratorium commenced from the date of filing and would continue until admission.

Conclusion: The application was allowed to proceed to the Resolution Professional stage, and interim moratorium was held to have commenced.

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